We have audited the accompanying Consolidated Balance Sheet of Ally Financial Inc. and subsidiaries (formerly GMAC Inc.) (the
Company) as of December 31, 2009 and 2008, and the related Consolidated Statements of Income, Changes in Equity, and Cash Flows for each of the three years in the period ended December 31, 2009. These financial
statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of the Company at December 31, 2009 and 2008, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2009, in conformity with
accounting principles generally accepted in the United States of America.

Balance at June 30, 2009, before conversion from limited liability company to a
corporation (c)

$

10,917

$

12,500

$

1,287

$

1,234

$

108

$

26,046

$

(4,081

)

4

Consolidated Statement of Changes in Equity

($ in millions)

Commonstock andpaid-incapital

Preferredstock

held by

U.S.Departmentof Treasury

Preferredstock

Retainedearnings(accumulateddeficit)

Accumulatedothercomprehensiveincome

Totalequity

Comprehensiveincome (loss)

Balance at June 30, 2009, after conversion from limited liability company to a corporations (c)

$

10,917

$

12,500

$

1,287

$

1,234

$

108

$

26,046

$

(4,081

)

Capital contributions (b)

55

55

Net loss

(5,720

)

(5,720

)

$

(5,720

)

Preferred stock dividends paid to the U.S. Department of Treasury

(695

)

(695

)

Preferred stock dividends (b)

(175

)

(175

)

Dividends to shareholders (b)

(274

)

(274

)

Issuance of preferred stock to the U.S. Department of Treasury

1,250

1,250

Conversion of preferred stock to the U.S. Department of Treasury to common stock

2,857

(2,857

)

Other comprehensive income

352

352

352

Balance at December 31, 2009

$

13,829

$

10,893

$

1,287

$

(5,630

)

$

460

$

20,839

$

(9,449

)

(a)

Refer to Note 27 to the Consolidated Financial Statements for further detail.

(b)

Refer to Note 25 to the Consolidated Financial Statements for further detail.

(c)

Effective June 30, 2009, GMAC LLC was converted from a Delaware limited liability company into a Delaware corporation and renamed GMAC Inc. Each
unit of each class of common membership interest issued and outstanding by GMAC LLC immediately prior to the conversion was converted into an equivalent number of shares of common stock of GMAC Inc. with substantially the same rights and
preferences as the common membership interests. Upon conversion, holders of GMAC LLC preferred interests also received an equivalent number of GMAC Inc. preferred stock with substantially the same rights and preferences as the former
preferred interests. Refer to Note 19 to the Consolidated Financial Statements for further details.

The Notes to the Consolidated Financial Statements are an integral part of these statements.

Decrease in collateralized borrowings upon initial adoption of the fair value option election



3,668



Capital contributions from stockholders/members

34

758

56

Other disclosures:

Proceeds from sales and repayments of mortgage loans held-for-investment originally designated as held-for-sale

1,010

1,747

6,790

Proceeds from sales of repossessed, foreclosed, and owned real estate

1,013

1,796

2,180

Liabilities assumed through acquisition





1,030

Consolidation of loans, net

1,410





Consolidation of collateralized borrowings

1,184





Deconsolidation of loans, net



2,353

25,856

Deconsolidation of collateralized borrowings



2,539

26,599

(a)

Includes securities-lending transactions where cash collateral is received and a corresponding liability is recorded, both of which are presented in investing
activities in the amount of $856 million for 2007.

(b)

2007 includes a $1 billion capital contribution from General Motors pursuant to the sale of 51% of GMAC to FIM Holdings LLC.

Represents the noncash effects of the loss portfolio transfer further described in Note 17 of the Consolidated Financial Statements.

The Notes to the Consolidated Financial Statements are an integral part of these
statements.

7

Notes to Consolidated Financial Statements

1. Description of Business and Significant Accounting Policies

GMAC Inc. (referred to herein as GMAC, we, our, or us) was founded in 1919 as a wholly owned subsidiary of General Motors
Corporation (currently General Motors LLC or GM). We are a leading, independent, globally diversified, financial services firm with approximately $172 billion in assets and operations in 40 countries. On December 24, 2008,
the Board of Governors of the Federal Reserve System approved our application to become a bank holding company under the Bank Holding Company Act of 1956, as amended (the BHC Act). Our primary banking subsidiary is Ally Bank, which is an
indirect wholly owned subsidiary of GMAC Inc.

Residential Capital, LLC

Residential Capital, LLC (ResCap), one of our mortgage subsidiaries, has been negatively impacted by the events and conditions
in the mortgage banking industry and the broader economy. The market deterioration has led to fewer sources of, and significantly reduced levels of, liquidity available to finance ResCaps operations. ResCap is highly leveraged relative to its
cash flow and has recognized credit and valuation losses resulting in a significant deterioration in capital. During 2009, ResCap received capital contributions from GMAC of $4.0 billion in the form of cash, mortgage loans held-for-sale (which
GMAC acquired from Ally Bank), receivables, the forgiveness of debt and affiliated payables, and recognized a gain on extinguishment of debt of $1.7 billion as a result of contributions and forgiveness of ResCaps outstanding notes, which
GMAC previously repurchased in the open market at a discount or through our private debt exchange and cash tender offers. Accordingly, ResCaps consolidated tangible net worth, as defined, was $275 million as of
December 31, 2009, and remained in compliance with all of its consolidated tangible net worth covenants. For this purpose, consolidated tangible net worth is defined as ResCaps consolidated equity excluding intangible assets and any
equity in Ally Bank to the extent included on ResCaps consolidated balance sheet. There continues to be a risk that ResCap during December 2009 will not be able to meet its debt service obligations, will default on its financial debt
covenants due to insufficient capital, and/or will be in a negative liquidity position in 2010 or future periods.

ResCap
actively manages its liquidity and capital positions and is continually working on initiatives to address its debt covenant compliance and liquidity needs including debt maturing in the next twelve months and other risks and uncertainties.
ResCaps initiatives include, but are not limited to, the following: continuing to work with key credit providers to optimize all available liquidity options; continued reduction of assets and other restructuring activities; focusing production
on government and prime conforming products; exploring strategic alternatives such as alliances, joint ventures, and other transactions with third parties; and continually exploring opportunities for funding and capital support from GMAC and its
affiliates. The outcomes of most of these initiatives are to a great extent outside of ResCaps control resulting in increased uncertainty as to their successful execution.

On December 30, 2009, we announced that as a result of our ongoing strategic review of how to best deploy GMACs current
and future capital liquidity, we have decided to pursue strategic alternatives with respect to ResCap. In order to maximize value, we will consider a variety of options including one or more sales, spin-offs, or other potential transactions. The
timing and form of execution of any such transactions will depend on market conditions.

Coincident with this announcement,
ResCap determined, in conjunction with GMAC, to change its intent with respect to a significant portion of its portfolio of previously held-for-investment mortgage loans to held-for-sale. GMAC also announced its decision to commit to a plan to sell
ResCaps U.K. and continental Europe platforms. As a result of these actions, ResCap incurred valuation losses of approximately $1.1 billion related to its change in intent with respect to certain of its mortgage loan portfolio and
impairments of $903 million related to its commitment to sell the U.K. and continental Europe platforms. These actions, inclusive of operating losses for the period, required GMAC to make capital contributions of $2.8 billion that were
made to ResCap during December 2009 in the form of cash, asset contributions, and forgiveness of certain affiliate payables and debt to ensure that ResCap maintained a minimum acceptable level of required capital to meet certain covenants.

In the future, GMAC and ResCap may take actions with respect to ResCap as each party deems appropriate. These actions may
include GMAC providing or declining to provide additional liquidity and capital support for ResCap; refinancing or restructuring some or all of ResCaps existing debt; the purchase or sale of ResCap debt securities in the public or private
markets for cash or other consideration; entering into derivative or other hedging or similar transactions with respect to

8

Notes to Consolidated Financial Statements

ResCap or its debt securities; GMAC purchasing assets from ResCap; or undertaking corporate transactions such as a tender offer or exchange offer for some or all of ResCaps outstanding debt
securities, a merger, sale, asset sales, consolidation, spin-off, distribution, or other business combination or reorganization or similar action with respect to all or part of ResCap and/or its affiliates. In this context, GMAC and ResCap typically
consider a number of factors to the extent applicable and appropriate including, without limitation, the financial condition, results of operations and prospects of GMAC and ResCap, ResCaps ability to obtain third-party financing, tax
considerations, the current and anticipated future trading price levels of ResCaps debt instruments, conditions in the mortgage banking industry and general economic conditions, other investment and business opportunities available to
GMAC and/or ResCap, and any nonpublic information that ResCap may possess or that GMAC receives from ResCap.

ResCap
remains heavily dependent on GMAC and its affiliates for funding and capital support, and there can be no assurance that GMAC or its affiliates will continue such actions or that GMAC will be successful in executing one or more sales, spin-offs, or
other potential transactions with respect to ResCap.

Although our continued actions through various funding and capital
initiatives demonstrate support for ResCap, other than as described above, there are currently no commitments or assurances for future funding and/or capital support. Consequently, there remains substantial doubt about ResCaps ability to
continue as a going concern. Should we no longer continue to support the capital or liquidity needs of ResCap or should ResCap be unable to successfully execute other initiatives, it would have a material adverse effect on ResCaps business,
results of operations, and financial position.

GMAC has extensive financing and hedging arrangements with ResCap that could
be at risk of nonpayment if ResCap were to file for bankruptcy. As of December 31, 2009, we had approximately $2.6 billion in secured financing arrangements with ResCap of which approximately $1.9 billion in loans had been
utilized. Amounts outstanding under the secured financing and hedging arrangements fluctuate. If ResCap were to file for bankruptcy, ResCaps repayments of its financing facilities, including those with us, could be slower than if ResCap had
not filed for bankruptcy. In addition, we could be an unsecured creditor of ResCap to the extent that the proceeds from the sale of our collateral are insufficient to repay ResCaps obligations to us. It is possible that other ResCap creditors
would seek to recharacterize our loans to ResCap as equity contributions or to seek equitable subordination of our claims so that the claims of other creditors would have priority over our claims. As a holder of unsecured notes, we would not receive
any distributions for the benefit of creditors in a ResCap bankruptcy before secured creditors are repaid. In addition, should ResCap file for bankruptcy, our $275 million investment related to ResCaps equity position would likely be
reduced to zero. If a ResCap bankruptcy were to occur and a substantial amount of our credit exposure is not repaid to us, it would have an adverse impact on our near-term net income and capital position, but we do not believe it would have a
materially adverse impact on GMACs consolidated financial position over the longer term.

GMAC Conversion

Effective June 30, 2009, GMAC converted (the Conversion) from a Delaware limited liability company to a
Delaware corporation pursuant to Section 18-216 of the Delaware Limited Liability Company Act and Section 265 of the Delaware General Corporation Law and was renamed GMAC Inc. In connection with the Conversion, each
unit of each class of membership interest issued and outstanding immediately prior to the Conversion was converted into shares of capital stock of GMAC with substantially the same rights and preferences as such membership interests. Refer to
Note 23 for additional information regarding the tax impact of the conversion.

Consolidation and Basis of Presentation

The consolidated financial statements include our accounts and accounts of our majority-owned subsidiaries after
eliminating all significant intercompany balances and transactions and include all variable interest entities (VIEs) in which we are the primary beneficiary. Refer to Note 28 for further details on our VIEs. Our accounting and reporting
policies conform to accounting principles generally accepted in the United States of America (GAAP).

We operate our
international subsidiaries in a similar manner as we operate in the United States of America (U.S. or United States), subject to local laws or other circumstances that may cause us to modify our procedures accordingly. The financial statements of
subsidiaries that operate outside of the United States generally are measured using the local currency

9

Notes to Consolidated Financial Statements

as the functional currency. All assets and liabilities of foreign subsidiaries are translated into U.S. dollars at year-end exchange rates. The resulting translation adjustments are recorded
in accumulated other comprehensive income, a component of equity. Income and expense items are translated at average exchange rates prevailing during the reporting period.

Use of Estimates and Assumptions

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities at the date of the financial statements and that affect income and expenses during the reporting period. In developing the estimates and assumptions, management uses all available evidence; however, actual
results could differ because of uncertainties associated with estimating the amounts, timing, and likelihood of possible outcomes.

Significant Accounting Policies

Cash and Cash Equivalents

Cash and cash equivalents include cash on hand and short-term, highly liquid investments with original maturities of 90 days or less.
Cash and cash equivalents that have restrictions on our ability to withdraw the funds are included in other assets on our Consolidated Balance Sheet. The balance of cash equivalents was $1.8 billion and $7.9 billion at
December 31, 2009 and 2008, respectively. The book value of cash equivalents approximates fair value because of the short maturities of these instruments. Certain securities with original maturities less than 90 days that are held as
a portion of longer-term investment portfolios, primarily held by GMAC Insurance, are classified as investment securities.

Securities

Our portfolio of securities includes government securities, corporate bonds, equity securities, asset- and mortgage-backed
securities, notes, interests in securitization trusts, and other investments. Securities are classified based on managements intent. Our trading securities primarily consist of retained and purchased interests in certain securitizations. The
retained interests are carried at fair value with changes in fair value recorded in current period earnings. Debt securities that management has the intent and ability to hold to maturity are classified as held-to-maturity and reported at amortized
cost. All other securities are classified as available-for-sale and carried at fair value with unrealized gains and losses included in accumulated other comprehensive income or loss, a component of equity, on an after-tax basis. Premiums and
discounts on debt securities are amortized as an adjustment to investment yield over the contractual term of the security. We employ a systematic methodology that considers available evidence in evaluating potential other-than-temporary impairment
of our investments classified as available-for-sale or held-to-maturity. If the cost of an investment exceeds its fair value, we evaluate, among other factors, the magnitude and duration of the decline in fair value. We also evaluate the financial
health of and business outlook for the issuer, the performance of the underlying assets for interests in securitized assets, and our intent and ability to hold the investment.

Once a decline in fair value of an equity security is determined to be other than temporary, an impairment charge is recorded to other
gain (loss) on investments, net, in our Consolidated Statement of Income, and a new cost basis in the investment is established. Once a decline in value of a debt security is determined to be other than temporary, the other-than-temporary impairment
is separated into credit and noncredit components in accordance with applicable accounting standards. Noncredit component losses of a debt security are recorded in other comprehensive income (loss) when the Company does not intend to sell the
security or is not more likely than not to have to sell the security prior to the securitys anticipated recovery. Noncredit component losses are amortized over the remaining life of the debt security by offsetting the recorded value of the
asset. Credit component losses of a debt security are charged to earnings. Realized gains and losses on investment securities are reported in other gain (loss) on investments, net, and are determined using the specific identification method.

Loans Held-for-sale

Loans held-for-sale may include automotive, commercial finance, and residential mortgage receivables and loans and are carried at the
lower of aggregate cost or estimated fair value. Loan origination fees, as well as discount points and incremental direct origination costs, are initially recorded as an adjustment of the cost of the loan and are reflected in the gain or loss on

10

Notes to Consolidated Financial Statements

sale of loans when sold. Fair value is determined by type of loan and is generally based on contractually established commitments from investors, current investor yield requirements, current
secondary market pricing, or cash flow models using market-based yield requirements. Certain of our domestic residential mortgages are reported at fair value as a result of the fair value option election. Refer to Note 27 for details on fair
value measurement.

Finance Receivables and Loans

Finance receivables and loans are reported at the principal amount outstanding, net of unearned income, premiums and discounts, and
allowances. Unearned income, which includes deferred origination fees reduced by origination costs and unearned rate support received from an automotive manufacturer, is amortized over the contractual life of the related finance receivable or loan
using the interest method. Loan commitment fees are generally deferred and amortized into commercial revenue over the commitment period.

We classify finance receivables and loans between loans held-for-sale and loans held-for-investment based on managements assessment
of our intent and ability to hold loans for the foreseeable future or until maturity. Managements intent and ability with respect to certain loans may change from time to time depending on a number of factors including economic, liquidity, and
capital conditions. Managements view of the foreseeable future is generally a twelve-month period based on the longest reasonably reliable net income, liquidity, and capital forecast period.

Nonaccrual Loans

Consumer and commercial revenue recognition is suspended when finance receivables and loans are placed on nonaccrual status. Generally,
finance receivable and loans are placed on nonaccrual status when delinquent for 90 days or when determined not to be probable of full collection. Exceptions include nonprime retail automotive receivables and commercial real estate loans that
are placed on nonaccrual status when delinquent for 60 days. Revenue accrued, but not collected, at the date finance receivables and loans are placed on nonaccrual status is reversed and subsequently recognized only to the extent it is received
in cash until it qualifies for return to accrual status. However, where there is doubt regarding the ultimate collectability of loan principal, all cash received is applied to reduce the carrying value of such loans. Finance receivables and loans
are restored to accrual status only when contractually current and the collection of future payments is reasonably assured.

Impaired
Loans

Loans are considered impaired when we determine it is probable that we will be unable to collect all amounts due
according to the terms of the loan agreement. Income recognition is consistent with that of nonaccrual loans discussed above. If the recorded investment in impaired loans exceeds the fair value, a valuation allowance is established as a component of
the allowance for loan losses. In addition to commercial loans specifically identified for impairment, we have pools of loans that are collectively evaluated for impairment, as discussed within the allowance for loan losses accounting policy.

Impaired loans also include loans that have been modified in troubled debt restructurings as a concession to borrowers
experiencing financial difficulties. Trouble debt restructurings typically result from our loss mitigation activities and could include rate reductions, principal forgiveness, forbearance, and other actions intended to minimize the economic loss and
to avoid foreclosure or repossession of collateral. A troubled debt restructuring involving only a modification of terms requires that the restructured loan be measured at the present value of the expected future cash flows discounted at the
effective interest rate at the time of modification, as based upon the original loan rate. Alternately, the loan may be measured for impairment based upon the fair value of the underlying collateral if the loan is collateral dependent. If the
measure of the loan is less than the recorded investment in the loan, we recognize an impairment by creating a valuation allowance or by adjusting an existing valuation allowance for the impaired loan.

Charge-offs

As a
general rule, consumer secured closed-end installment loans are written down to estimated collateral value, less costs to sell, once a loan becomes 120 days past due; and consumer unsecured open-end (revolving) loans are charged off at
180 days past due. Closed-end consumer loans secured by real estate are written down to estimated collateral value, less costs to sell, once a mortgage loan becomes 180 days past due. Retail loans in bankruptcy that are 60 days past
due are charged off within 60 days of receipt of notification of filing from the bankruptcy court.

11

Notes to Consolidated Financial Statements

Commercial loans are individually evaluated and where collectability of the recorded
balance is in doubt are written down to fair value of the collateral less costs to sell. Generally, all commercial loans are charged off when they are 360 days or more past due.

Allowance for Loan and Lease Losses

The allowance for loan and lease losses (the allowance) is managements estimate of incurred losses in the lending portfolios.
Portions of the allowance are specified to cover the estimated losses on commercial loans specifically identified for impairment in accordance with applicable accounting standards. The unspecified portion of the allowance covers estimated losses on
the homogeneous portfolios of finance receivables and loans collectively evaluated for impairment in accordance with applicable accounting standards. Amounts determined to be uncollectible are charged against the allowance on our Consolidated
Balance Sheet. Additionally, losses arising from the sale of repossessed assets, collateralizing automotive finance receivables, and loans are charged to the allowance. Recoveries of previously charged-off amounts are credited at time of collection.

Loans that are individually evaluated and determined not to be impaired are grouped into pools, based on similar risk
characteristics, and evaluated for impairment in accordance with applicable accounting standards. Loans determined to be specifically impaired are measured based on the present value of expected future cash flows discounted at the loans
effective interest rate, an observable market price, or the fair value of the collateral, whichever is determined to be the most appropriate. Estimated costs to sell or realize the value of the collateral on a discounted basis are included in the
impairment measurement.

We perform periodic and systematic detailed reviews of our lending portfolios to identify inherent
risks and to assess the overall collectability of those portfolios. The allowance related to portfolios collectively reviewed for impairment (generally consumer finance receivables and loans) is based on aggregated portfolio evaluations by product
type. Loss models are utilized for these portfolios, which consider a variety of factors including, but not limited to, historical loss experience, current economic conditions, anticipated repossessions or foreclosures based on portfolio trends,
delinquencies and credit scores, and expected loss factors by receivable and loan type. Loans in the commercial portfolios are generally reviewed on an individual loan basis, and if necessary, an allowance is established for individual loan
impairment. Loans subject to individual reviews are analyzed based on factors including, but not limited to, historical loss experience, current economic conditions, collateral performance, performance trends within specific geographic and portfolio
segments, and any other pertinent information that results in the estimation of the allowance. The evaluation of these factors for both consumer and commercial finance receivables and loans involves complex, subjective judgments.

Securitizations and Other Off-balance Sheet Transactions

We securitize, sell, and service retail finance receivables, operating leases, wholesale loans, securities, and residential loans.
Securitizations are accounted for either as sales or secured financings. Interests in the securitized and sold assets are generally retained in the form of senior or subordinated interests, interest- or principal-only strips, cash reserve accounts,
residual interests, and servicing rights. With the exception of servicing rights and senior interests, our retained interests are generally subordinate to investors interests. The investors and the securitization trusts generally have no
recourse to our other assets outside of customary market representation and warranty repurchase provisions and in certain transactions, early payment default provisions and other forms of guarantee or commitments.

We retain servicing responsibilities for all of our retail finance receivable, operating lease, and wholesale loan securitizations and
for the majority of our residential loan securitizations. We may receive servicing fees based on the securitized loan balances and certain ancillary fees, all of which are reported in servicing fees in the Consolidated Statement of Income. We also
retain the right to service the residential loans sold to Ginnie Mae, Fannie Mae, and Freddie Mac. We also serve as the collateral manager in the securitizations of commercial investment securities.

Gains or losses on securitizations and sales depend on the previous carrying amount of the assets involved in the transfer and are
allocated between the assets sold and the retained interests based on relative fair values except for certain servicing assets or liabilities, which are initially recorded at fair value at the date of sale. The estimate of the fair value of the
retained interests requires us to exercise significant judgment about the timing and amount of future cash flows from interests. Refer to the Note 27 for a discussion of fair value estimates.

12

Notes to Consolidated Financial Statements

Gains or losses on securitizations and sales are reported in gain (loss) on mortgage and
automotive loans, net, in our Consolidated Statement of Income for retail finance receivables, wholesale loans, and residential loans. Declines in the fair value of retained interests below the carrying amount are reflected in other comprehensive
income, a component of equity, or as other (loss) gain on investments, net, in our Consolidated Statement of Income if declines are determined to be other than temporary or if the interests are classified as trading. Retained interests, as well as
any purchased securities, are generally included in available-for-sale investment securities, trading investment securities, or other assets. Designation of available-for-sale or trading depends on managements intent. Securities that are
noncertificated and cash reserve accounts related to securitizations are included in other assets on our Consolidated Balance Sheet.

Mortgage Servicing Rights

Primary servicing rights represent our right to service mortgages securitized by us or sold through agency and third-party whole loan
sales. Primary servicing involves the collection of payments from individual borrowers and the distribution of these payments to the investors. Master servicing rights represent our right to service mortgage- and asset-backed securities and
whole-loan packages issued for investors. Master servicing involves the collection of borrower payments from primary servicers and the distribution of those funds to investors in mortgage- and asset-backed securities and whole-loans packages. We
also purchase and sell primary and master servicing rights through transactions with other market participants.

We capitalize
the value expected to be realized from performing specified mortgage servicing activities for others as mortgage servicing rights (MSRs). These capitalized servicing rights are purchased or retained upon sale or securitization of mortgage loans.
Mortgage servicing rights are not recorded on securitizations accounted for as secured financings. We measure mortgage servicing assets and liabilities at fair value at the date of sale.

We define our classes of servicing rights based on both the availability of market inputs and the manner in which we manage the risks of
our servicing assets and liabilities. We leverage all available relevant market data to determine the fair value of our recognized servicing assets and liabilities.

Since quoted market prices for MSRs are not available, we estimate the fair value of MSRs by determining the present value of future
expected cash flows using modeling techniques that incorporate managements best estimates of key variables including expected cash flows, credit losses, prepayment speeds, and return requirements commensurate with the risks involved. Cash flow
assumptions are modeled using our internally forecasted revenue and expenses, and where possible, the reasonableness of assumptions is periodically validated through comparisons to other market participants. Credit loss assumptions are based upon
historical experience and the characteristics of individual loans underlying the MSRs. Prepayment speed estimates are determined from historical prepayment rates on similar assets or obtained from third-party data. Return requirement assumptions are
determined using data obtained from market participants, where available, or based on current relevant interest rates plus a risk-adjusted spread. We also consider other factors that can impact the value of the MSRs, such as surety provider
termination clauses and servicer terminations that could result if we failed to materially comply with the covenants or conditions of our servicing agreements and did not remedy the failure. Since many factors can affect the estimate of the fair
value of mortgage servicing rights, we regularly evaluate the major assumptions and modeling techniques used in our estimate and review these assumptions against market comparables, if available. We monitor the actual performance of our MSRs by
regularly comparing actual cash flow, credit, and prepayment experience to modeled estimates.

Repossessed and Foreclosed Assets

Assets are classified as repossessed and foreclosed and included in other assets when physical possession of the
collateral is taken regardless of whether foreclosure proceedings have taken place. Repossessed and foreclosed assets are carried at the lower of the outstanding balance at the time of repossession or foreclosure or the fair value of the asset less
estimated costs to sell. Losses on the revaluation of repossessed and foreclosed assets are charged to the allowance for loan and lease losses at the time of repossession.

Goodwill and Other Intangibles

Goodwill and other intangible assets, net of accumulated amortization, are reported in other assets. In accordance with applicable
accounting standards, goodwill represents the excess of the cost of an acquisition over the fair value of net assets acquired. Goodwill is reviewed for impairment utilizing a two-step process. The first step of the impairment test requires us to
define the reporting units and compare the fair value of each of these reporting units to the respective carrying value. The fair

13

Notes to Consolidated Financial Statements

value of the reporting units in our impairment test is determined based on various analyses including discounted cash flow projections. If the carrying value is less than the fair value, no
impairment exists, and the second step does not need to be completed. If the carrying value is higher than the fair value or there is an indication that impairment may exist, a second step must be performed to compute the amount of the impairment,
if any. Applicable accounting standards require goodwill to be tested for impairment annually at the same time every year and whenever an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit
below its carrying amount. Our annual goodwill impairment assessment is concluded upon during the fourth quarter each year. Refer to Note 14 for a discussion of the related goodwill impairment charge in 2009 and 2008.

Other intangible assets, which include customer lists, trademarks, and other identifiable intangible assets, are amortized on a
straight-line basis over an estimate useful life of 3 to 15 years and are subject to impairment testing.

Investment in Operating
Leases

Investment in operating leases is reported at cost, less accumulated depreciation and net of impairment charges and
origination fees or costs. Income from operating lease assets that includes lease origination fees, net of lease origination costs, is recognized as operating lease revenue on a straight-line basis over the scheduled lease term. Depreciation of
vehicles is generally provided on a straight-line basis to an estimated residual value over a period, consistent with the term of the underlying operating lease agreement. We evaluate our depreciation policy for leased vehicles on a regular basis.

We have significant investments in the residual values of assets in our operating lease portfolio. The residual values
represent an estimate of the values of the assets at the end of the lease contracts and are initially determined based on residual values established at contract inception by consulting independently published residual value guides. Realization of
the residual values is dependent on our future ability to market the vehicles under the prevailing market conditions. Over the life of the lease, we evaluate the adequacy of our estimate of the residual value and may make adjustments to the
depreciation rates to the extent the expected value of the vehicle (including any residual support payments from GM) at lease termination changes. In addition to estimating the residual value at lease termination, we also evaluate the current value
of the operating lease asset and test for impairment to the extent necessary based on market considerations and portfolio characteristics. Impairment is determined to exist if the undiscounted expected future cash flows are lower than the carrying
value of the asset. If our operating lease assets are considered to be impaired, the impairment is measured as the amount by which the carrying amount of the assets exceeds the fair value as estimated by discounted cash flows. Certain triggering
events necessitated an impairment review of the investment in operating leases of our Global Automotive Services beginning in the second quarter of 2008. Refer to Note 11 for a discussion of the impairment charges recognized in 2008.

When a lease vehicle is returned to us, the asset is reclassified from investment in operating leases to other assets at the
lower-of-cost or estimated fair value, less costs to sell.

Impairment of Long-lived Assets

The carrying value of long-lived assets (including property and equipment and certain identifiable intangibles) are evaluated for
impairment whenever events or changes in circumstances indicate that their carrying values may not be recoverable from the estimated undiscounted future cash flows expected to result from their use and eventual disposition. Recoverability of assets
to be held and used is measured by a comparison of their carrying amount to future net undiscounted cash flows expected to be generated by the assets. If these assets are considered to be impaired, the impairment is measured as the amount by which
the carrying amount of the assets exceeds the fair value as estimated by discounted cash flows. Refer to the previous section of this note titled Investment in Operating Leases for a discussion pertaining to impairments related to our investment in
operating leases in 2009. No material impairment was recognized in 2008 or 2007.

An impairment test on an asset group to be
discontinued, held-for-sale, or otherwise disposed of is performed upon occurrence of a triggering event or when certain criteria are met (e.g., the asset can be disposed of within twelve months, appropriate levels of authority have approved
the sale, and there is an active program to locate a buyer). Long-lived assets held-for-sale are recorded at the lower of their carrying amount or estimated fair value less cost to sell. If the carrying value of the assets held-for-sale exceeds the
fair value less cost to sell, we recognize an impairment loss based on the excess of the carrying amount over the fair value of the assets less cost to sell. During 2009, impairment losses were recognized on asset groups that were classified as
held-for-sale or disposed of by sale. Refer to Note 2 for a discussion of held-for-sale and discontinued operations.

14

Notes to Consolidated Financial Statements

Property and Equipment

Property and equipment stated at cost, net of accumulated depreciation and amortization, are reported in other assets. Included in
property and equipment are certain buildings, furniture and fixtures, leasehold improvements, company vehicles, IT hardware and software, and capitalized software costs. Depreciation is computed on the straight-line basis over the estimated useful
lives of the assets, which generally ranges from 3 to 30 years. Capitalized software is generally amortized on a straight-line basis over its useful life, which generally ranges from three to five years. Capitalized software that is not
expected to provide substantive service potential or for which development costs significantly exceed the amount originally expected is considered impaired and written down to fair value. Software expenditures that are considered general,
administrative, or of a maintenance nature are expensed as incurred.

Deferred Policy Acquisition Costs

Commissions, including compensation paid to producers of automotive service contracts and other costs of acquiring insurance that are
primarily related to and vary with the production of business, are deferred and recorded in other assets. Deferred policy acquisition costs are amortized over the terms of the related policies and service contracts on the same basis as premiums and
revenue are earned except for direct response advertising costs, which are amortized over their expected future benefit. We group costs incurred for acquiring like contracts and consider anticipated investment income in determining the
recoverability of these costs.

Private Debt Exchange and Cash Tender Offers

In evaluating the accounting for the private debt exchange and cash tender offers (the Offers) in 2008, management was required to make a
determination as to whether the Offers should be accounted for as a troubled debt restructuring (TDR) or an extinguishment of GMAC and ResCap debt. In concluding on the accounting, management evaluated applicable accounting guidance. The relevant
accounting guidance required us to determine whether the exchanges of debt instruments should be accounted for as a TDR. A TDR results when it is determined, evaluating six factors considered to be indicators of whether a debtor is experiencing
financial difficulties, that the debtor is experiencing financial difficulties, and the creditors grant a concession; otherwise, such exchanges should be accounted for as an extinguishment or modification of debt. The assessment of this critical
accounting estimate required management to apply a significant amount of judgment in evaluating the inputs, estimates, and internally generated forecast information to conclude on the accounting for the Offers.

In assessing whether GMAC was experiencing financial difficulties for the purpose of accounting for the Offers, management applied
applicable accounting guidance. Our assessment considered internal analyses such as our short- and long-term liquidity projections, net income forecasts, and runoff projections. These analyses were based upon our consolidated financial condition and
our comprehensive ability to service both GMAC and ResCap obligations and were based only on our current business capabilities and funding sources. In addition to our baseline projections, these analyses incorporated stressed scenarios reflecting
continued deterioration of the credit markets, further GM financial distress, and significant curtailments of loans originations. Management assigned probability weights to each scenario to determine an overall risk-weighted projection of our
ability to meet our consolidated obligations as they come due. These analyses indicated that we could service all GMAC and ResCap obligations as they came due in the normal course of business.

Our assessment also considered capital market perceptions of our financial condition, such as our credit agency ratings, market values
for our debt, analysts reports, and public statements made by us and our stakeholders. Due to the rigor applied to our internal projections, management placed more weight on our internal projections and less weight on capital market
expectations.

Based on this analysis and after the consideration of the applicable accounting guidance, management concluded
the Offers were not deemed to be a TDR. As a result of this conclusion, the Offers were accounted for as an extinguishment of debt.

Applying extinguishment accounting, we recognized a gain at the time of the exchange for the difference between the carrying value of the
exchanged notes and the fair value of the newly issued securities. In accordance with applicable fair value accounting guidance related to Level 3 fair value measures, we performed various analyses with regard to the valuation of the
newly issued instruments. Level 3 fair value measures are valuations that are derived primarily from unobservable inputs and rely heavily on management assessments, assumptions, and judgments. In determining the fair value of the newly

15

Notes to Consolidated Financial Statements

issued instruments, we performed an internal analysis using trading levels on the trade date, December 29, 2008, of existing GMAC unsecured debt, adjusted for the features of the new
instruments. We also obtained bid-ask spreads from brokers attempting to make a market in the new instruments.

Based on the
determined fair values, we recognized a pretax gain upon extinguishment of $11.5 billion and reflected the newly issued preferred shares at their face value, which was estimated to be $234 million on December 29, 2008. The
majority of costs associated with the Offers were deferred in the basis of the newly issued bonds. In the aggregate, the offers resulted in an $11.7 billion increase to our consolidated equity position.

Unearned Insurance Premiums and Service Revenue

Insurance premiums, net of premiums ceded to reinsurers, and service revenue are earned over the terms of the policies. The portion of
premiums and service revenue written applicable to the unexpired terms of the policies is recorded as unearned insurance premiums or unearned service revenue. For extended service and maintenance contracts, premiums and service revenues are earned
on a basis proportionate to the anticipated loss emergence. For other short duration contracts, premiums and unearned service revenue are earned on a pro rata basis.

Reserves for Insurance Losses and Loss Adjustment Expenses

Reserves for insurance losses and loss adjustment expenses are established for the unpaid cost of insured events that have occurred as of
a point in time. More specifically, the reserves for insurance losses and loss adjustment expenses represent the accumulation of estimates for both reported losses and those incurred, but not reported, including claims adjustment expenses relating
to direct insurance and assumed reinsurance agreements. Estimates for salvage and subrogation recoverable are recognized at the time losses are incurred and netted against provision for insurance losses and loss adjustment expenses. Reserves are
established for each business at the lowest meaningful level of homogeneous data. Since the reserves are based on estimates, the ultimate liability may vary from such estimates. The estimates are regularly reviewed and adjustments, which can
potentially be significant, are included in earnings in the period in which they are deemed necessary.

Reserves for Loans Sold with
Recourse

Reserves for loans sold with recourse result from customary market representations and warranties we provide when
we sell or securitize loans. These provisions are generally triggered in cases of origination fraud, missing or insufficient underwriting documentation, or borrower compliance violations that exist at the time of sale. The initial reserve,
classified in accrued expenses and other liabilities on our Consolidated Balance Sheet, is established on the transfer date at fair value and is recorded as gain (loss) on mortgage and automotive loans, net, on our Consolidated Statement of Income.
We recognize changes in the liability as other operating expenses on our Consolidated Statement of Income. We use internally developed models to estimate the liability. Significant assumptions in the models include borrower performance, investor
repurchase demand behavior, historic loan defect experience, and loss severity. Adjustments may be made to the modeled losses to take into account qualification factors, such as macroeconomic and other external factors. We regularly evaluate the
major assumptions and modeling techniques used in our estimate, and we align assumptions with the our allowance and cash flow forecasting models. The models and assumptions require the use of judgment and can have a significant impact on the
determination of the liability.

Derivative Instruments and Hedging Activities

In accordance with applicable accounting standards, all derivative financial instruments, whether designated for hedge accounting or not,
are required to be recorded on the balance sheet as assets or liabilities carried at fair value. At inception of a hedging relationship, we designate each qualifying derivative financial instrument as a hedge of the fair value of a specifically
identified asset or liability (fair value hedge), as a hedge of the variability of cash flows to be received or paid related to a recognized asset or liability (cash flow hedge), or as a hedge of the foreign currency exposure of a net investment in
a foreign operation. We also use derivative financial instruments, which although acquired for risk management purposes, do not qualify for hedge accounting under GAAP. Changes in the fair value of derivative financial instruments that are
designated and qualify as fair value hedges, along with the gain or loss on the hedged asset or liability attributable to the hedged risk, are recorded in the current period earnings. For qualifying cash flow hedges, the effective portion of the
change in the fair value of the derivative financial instruments is recorded in accumulated other comprehensive income, a component of equity, and recognized in the income statement when the hedged cash flows affect earnings. For a derivative
designated as hedging the foreign currency exposure of a net investment in a foreign operation, the gain or loss is reported in accumulated other

16

Notes to Consolidated Financial Statements

comprehensive income as part of the cumulative translation adjustment with the exception of the spot to forward difference, which is recorded in current period earnings. Changes in the fair value
of derivative financial instruments held for risk management purposes that do not meet the criteria to qualify as hedges under GAAP are reported in current period earnings. The ineffective portions of fair value and cash flow hedges are immediately
recognized in earnings.

We formally document all relationships between hedging instruments and hedged items and or risk
management objectives for undertaking various hedge transactions. This process includes linking all derivatives that are designated as fair value, cash flow, or net investment hedges to specific assets and liabilities on our Consolidated Balance
Sheet to specific firm commitments or the forecasted transactions. Both at the hedges inception and on an ongoing basis, we formally assess whether the derivatives that are used in hedging relationships are highly effective in offsetting
changes in fair values or cash flows of hedged items.

The hedge accounting treatment described herein is no longer applied if
a derivative financial instrument is terminated or the hedge designation is removed or is assessed to be no longer highly effective. For these terminated fair value hedges, any changes to the hedged asset or liability remain as part of the basis of
the asset or liability and are recognized into income over the remaining life of the asset or liability. For terminated cash flow hedges, unless it is probable that the forecasted cash flows will not occur within a specified period, any changes in
fair value of the derivative financial instrument previously recognized remain in other comprehensive income, a component of equity, and are reclassified into earnings in the same period that the hedged cash flows affect earnings. The previously
recognized net derivative gain or loss for a net investment hedge should continue to remain in accumulated other comprehensive income until earnings are impacted by sale or liquidation of the associated foreign operation. In all instances, any
subsequent changes in fair value of the derivative instrument will be recorded into earnings.

Loan Commitments

We enter into commitments to make loans whereby the interest rate on the loans is set prior to funding (i.e., interest rate lock
commitments). Interest rate lock commitments for loans to be originated or purchased for sale and for loans to be purchased and held-for-investment are derivative financial instruments carried at fair value in accordance with applicable accounting
standards with changes in fair value included within current period earnings. The fair value of the interest rate lock commitments include expected net future cash flows related to the associated servicing of the loan are accounted for through
earnings for all written loan commitments accounted at fair value. Servicing assets are recognized as distinct assets once they are contractually separated from the underlying loan by sale or securitization. Interest rate lock commitments are
recorded at fair value with changes in value recognized in current period earnings. Day-one gains or losses on derivative interest rate lock commitments are recognized when applicable.

Income Taxes

As of
June 30, 2009, GMAC converted from an LLC to a Delaware corporation, thereby ceasing to be a pass-through entity for income tax purposes. As a result, we recorded our deferred tax assets and liabilities using the estimated corporate
effective tax rate. Our banking, insurance, and foreign subsidiaries were generally always corporations and continued to be subject to tax and provide for U.S. federal, state, and foreign income taxes.

Deferred tax assets and liabilities are established for future tax consequences of events that have been recognized in the financial
statements or tax returns based on enacted tax laws and rates. Deferred tax assets are recognized subject to managements judgment that realization is more likely than not. Deferred tax assets are reduced through the recording of valuation
allowances in cases where realization is not more likely than not. In addition, tax benefits related to positions considered uncertain are recognized only if, based on the technical merits of the issue, we are more likely than not to sustain the
position and then at the largest amount that is greater than 50% likely to be realized upon ultimate settlement.

Recently Adopted
Accounting Standards

Accounting Standards Codification (ASC) (Formerly SFAS No. 168)

In June 2009, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting
Standards No. 168, The FASB Accounting Standards CodificationTM
and the Hierarchy of Generally Accepted Accounting Principles-a replacement of FASB Statement
No. 162 (SFAS 168). This standard established the FASB Codification as the

17

Notes to Consolidated Financial Statements

exclusive authoritative reference for U.S. GAAP and superseded all existing non-SEC accounting and reporting standards. As a result, we updated the references to accounting literature
contained in our financial statement disclosures to reflect the ASC structure.

As of January 1, 2009, we adopted SFAS No. 161
(SFAS 161), which amended ASC Topic 815, Derivatives and Hedging. SFAS 161 required specific disclosures regarding the location and amounts of derivative instruments in the financial statements, how derivative instruments and
related hedged items were accounted for, and how derivative instruments and related hedged items affected the financial position, financial performance, and cash flows. Because SFAS 161 impacted only the disclosure and not the accounting
treatment for derivative instruments and related hedged items, the adoption of SFAS 161 did not have an impact on our financial statements. Refer to Note 21 for disclosures required by SFAS 161.

As of June 30, 2009, we adopted FSP FAS No. 107-1 and APB No. 28-1, which amended ASC Topic 825,
Financial Instruments, to require disclosures about the fair value of financial instruments in interim periods. Additionally, the guidance amends ASC Topic 270, Interim Reporting, to require these disclosures in all interim
financial statements. Since this guidance related only to disclosures, adoption did not have a material effect on our financial statements.

As of April 1, 2009, we adopted FSP FAS No. 115-2 and FSP FAS 124-2, which amended the
guidance for determining and recognizing impairment on debt securities. Under this FSP, an other-than-temporary impairment must be recognized if an entity has the intent to sell the debt security or if it is more likely than not that it will be
required to sell the debt security before recovery of its amortized cost basis. In addition, the guidance changed the amount of impairment to be recognized in current period earnings when an entity does not have the intent to sell or it is more
likely than not that it will be required to sell the debt security. In these cases, only the amount of the impairment associated with credit losses is recognized in earnings with all other fair value components in other comprehensive income. The
guidance also required additional disclosures regarding the calculation of credit losses as well as factors considered in reaching a conclusion that an investment is not other-than-temporarily impaired. This guidance was effective for periods ending
after June 15, 2009, and its adoption did not have a material impact on our financial statements.

As of April 1, 2009, we adopted
FSP FAS No. 157-4, which amended ASC Topic 820, Fair Value Measurements and Disclosures, and clarified the guidance for determining fair value. This standard provided application guidance to assist preparers in
determining whether an observed transaction had occurred in an inactive market and if the transaction was distressed. This standard was effective for periods ending after June 15, 2009, and its adoption did not have a material impact on
our financial statements.

In December 2009, the FASB issued ASU 2009-16, which amends ASC Topic 860, Transfers and Servicing.
This standard removes the concept of a qualifying special-purpose entity (QSPE) and creates more stringent conditions for reporting a transfer of a portion of a financial asset as a sale. To determine if a transfer is to be accounted for as a
sale, the transferor must assess whether it and all of the entities included in its consolidated financial statements have surrendered control of the assets. This standard is effective for us as of January 1, 2010, with adoption applied
prospectively for transfers that occur on and after the effective date. The elimination of the QSPE concept will require us to retrospectively assess all current off-balance sheet QSPE structures for consolidation under ASC Topic 810,
Consolidation, and record a cumulative-effect adjustment to retained earnings for any consolidation change. Retrospective application of ASU 2009-16, specifically the QSPE removal, is being assessed as part of the analysis required from
ASU 2009-17, Improvements to Financial Reporting by Enterprises Involved with Variable Interest Entities. Refer to the section below for further information related to ASU 2009-17.

In December 2009, the FASB issued ASU 2009-17, which amends
ASC Topic 810, Consolidation. This standard addresses the primary beneficiary assessment criteria for determining whether an entity is required to consolidate a variable interest entity (VIE). This standard requires an entity
to determine whether it is the primary beneficiary by performing a qualitative assessment; rather than using the quantitative-based model required under the previous accounting guidance. The qualitative assessment consists of determining whether the
entity has both the power to direct the activities that most significantly impact the VIEs economic performance and has the right to receive benefits or obligation to absorb losses that could potentially be significant to the VIE. This
standard is effective for us as of January 1, 2010. As a result of the implementation of ASU 2009-16 and ASU 2009-17, we will be required to consolidate various securitization structures that were previously held off-balance
sheet. On January 1, 2010, this consolidation will result in a net increase of $17.6 billion to assets and liabilities on our Consolidated Balance Sheet ($10.1 billion of the increase relates to operations classified as
held-for-sale). As part of the day-one entry, there will also be an immaterial adjustment to our opening equity balance.

2. Discontinued
and Held-for-sale Operations

Discontinued Operations

During the three months ended September 30, 2009, we committed to sell the U.S. consumer property and casualty insurance
business of our Insurance operations. These operations provide vehicle and home insurance in the United States through a number of distribution channels, including independent agents, affinity groups, and the internet. Additionally, during the three
months ended December 31, 2009, we committed to sell the U.K. consumer property and casualty insurance business. In connection with the classification of these operations as held-for-sale we recognized pretax losses, including
estimated direct costs to transact a sale, of $250 million during the year ended December 31, 2009. The losses represent the impairment recognized to present the discontinued operations at the lower of cost or fair value less costs to
sell. The fair values less costs to sell were determined based on sales price negotiations with potential third-party purchasers (a Level 2 fair value input) and price discoveries with potential third-party purchasers adjusted for factors
deemed appropriate by management (a Level 3 fair value input). During the first quarter of 2010, the sale of our U.S. consumer property and casualty business was completed. We expect to complete the sale of our U.K. consumer property and
casualty insurance business during 2010.

During the three months ended December 31, 2009, we committed to sell the
continental Europe operations of ResCaps International Business Group (IBG). These operations included residential mortgage loan origination, acquisition, servicing, asset management, sale, and securitizations in the Netherlands and
Germany. In connection with the classification of these operations as held-for-sale, we recognized pretax losses, including estimated direct costs to transact a sale, of $723 million during the three months ended December 31, 2009.
The losses represent the impairment recognized to present the held-for-sale operations at the lower of cost or fair value less costs to sell. The fair values less costs to sell were determined based on sales price negotiations with potential
third-party purchasers adjusted for anticipated price fades or other factors deemed appropriate by management (a Level 3 fair value input). We expect to complete the sale of the IBGs continental Europe operations during 2010.

During the three months ended December 31, 2009, we committed to sell the U.K. operations of ResCaps IBG and classified these
operations as held-for-sale. The operations include residential mortgage loan origination, acquisition, servicing, asset management, sale, and securitizations. In connection with the classification as held-for-sale, we recognized a pretax loss,
including estimated direct costs to transact a sale, of $181 million. The loss represents the impairment recognized to present the held-for-sale operations at the lower of cost or fair value less costs to sell. The fair values less costs to sell
were determined based on price discoveries with potential third party purchasers adjusted for anticipated price fades or other factors deemed appropriate by management (a Level 3 fair value input). During the three months ended June 30, 2010, we
classified these operations as discontinued. We expect to complete the sale of these operations during 2010.

During the three
months ended September 30, 2009, we committed to sell certain operations of our International Automotive Finance operations. These include the sale of our Argentina operations and our Masterlease operations in the United Kingdom and Italy.
Our Masterlease operations provide full-service individual leasing and fleet leasing products, including maintenance, fleet, and accident management services as well as fuel programs, short-term vehicle rental, and title

19

Notes to Consolidated Financial Statements

and licensing services. Additionally, during the three months ended December 31, 2009, we committed to sell our operations in Poland and Ecuador as well as our Masterlease operations in
Australia, Belgium, France, Mexico, the Netherlands, and Poland. In connection with the classification of these operations as held-for-sale we recognized pretax losses of $416 million during the year ended December 31, 2009. The
losses represent the impairment recognized to present the discontinued operations at the lower of cost or fair value less costs to sell. The fair value less costs to sell were determined using final sales agreements or sales price negotiations
entered into by willing parties (a Level 2 fair value input). As of December 31, 2009, the sale of the Masterlease operations in Mexico, Italy, and the Netherlands was completed. During the three months ended June 30, 2010, we
completed the sale of our Poland operations and our Masterlease operations in Australia, Poland, Belgium, and France. In July 2010, we completed the sale of our Argentina operations. We expect to complete the sale of our Ecuador operations and our
Masterlease operations in the United Kingdom during 2010.

During the three months ended June 30, 2010, we classified the
operations of our International Automotive Finance operations in Australia and Russia as discontinued.

During the three
months ended December 31, 2009, we committed to sell the North American-based factoring business of our Commercial Finance Group. In connection with the classification of these operations as held-for-sale we recognized pretax losses of $30
million during the year ended December 31, 2009. The losses represent the impairment recognized to present the held-for-sale operations at the lower of cost or fair value, less costs to transact the sale. The fair value less costs to sell
was determined based on preliminary bids with potential third-party purchasers (a Level 2 fair value input). On April 30, 2010, the sale of the North American based factoring business was completed.

The pretax losses recognized as of December 31, 2009, including the direct costs to transact a sale, for the discontinued operations
could differ from the ultimate sales price due to the fluidity of ongoing negotiations, price volatility, changing interest rates, changing foreign currency rates, and future economic conditions.

Selected financial information of these discontinued operations is summarized below.

Year ended December 31, ($ in millions)

2009

2008

2007

Select Mortgage operations

Total net (loss)

$

(637

)

$

(2,073

)

$

(354

)

Pretax (loss) including direct costs to transact a sale

(2,234

)

(2,955

)

(757

)

Tax expense (benefit)



100

(174

)

Select Insurance operations

Total net revenue

$

1,448

$

1,780

$

1,737

Pretax (loss) income including direct costs to transact a sale

(810

)

97

121

Tax (benefit) expense

(99

)

25

38

Select International operations

Total net revenue

$

298

$

375

$

402

Pretax (loss) income including direct costs to transact a sale

(291

)

(19

)

45

Tax expense

33

8

14

Select Commercial Finance operations

Total net revenue

$

39

$

49

$

64

Pretax (loss) income including direct costs to transact a sale

(32

)

(23

)

18

Tax (benefit) expense

(9

)

1

2

At December 31, 2009, we classified the assets and liabilities of these operations as discontinued
operations using generally accepted accounting principles in the United States of America, as the associated operations and cash flows will be eliminated from our ongoing operations and we will not have any significant continuing involvement in
their operations after the respective sale transactions. The previously issued Consolidated Financial Statements, for all periods presented, have been recast, such that all of the operating results for these operations have been removed from
continuing operations and are presented separately as discontinued operations, net of tax. The Notes to Consolidated Financial Statements have been adjusted to exclude discontinued operations unless otherwise noted.

20

Notes to Consolidated Financial Statements

Held-for-sale Operations

All of our discontinued operations are classified as held-for-sale as of December 31, 2009, except for our International
Automotive Finance operations in Australia and Russia.

The assets and liabilities of operations held-for-sale at
December 31, 2009, are summarized below.

($ in millions)

SelectMortgage

operations (a)

SelectInsurance

operations (b)

SelectInternationaloperations (c)

SelectCommercialFinanceGroupoperations (d)

Totalheld-for-saleoperations

Assets

Cash and cash equivalents

Noninterest bearing

$

4

$

578

$

33

$



$

615

Interest bearing

151



11



162

Total cash and cash equivalents

155

578

44



777

Trading securities

36







36

Investment securities  available-for-sale



794





794

Loans held-for-sale

214







214

Finance receivables and loans, net of unearned income

Consumer

2,650



400



3,050

Commercial





246

233

479

Notes receivable from General Motors





14



14

Allowance for loan losses

(89

)



(11

)



(100

)

Total finance receivables and loans, net

2,561



649

233

3,443

Investment in operating leases, net





885



885

Mortgage servicing rights

(26

)







(26

)

Premiums receivable and other insurance assets



1,126





1,126

Other assets

512

176

135



823

Impairment on assets of held-for-sale operations

(903

)

(231

)

(324

)

(30

)

(1,488

)

Total assets

$

2,549

$

2,443

$

1,389

$

203

$

6,584

Liabilities

Debt

Short-term borrowings

$



$

34

$

57

$



$

91

Long-term debt

1,749



237



1,986

Total debt

1,749

34

294



2,077

Interest payable

3



1



4

Unearned insurance premiums and service revenue



517





517

Reserves for insurance losses and loss adjustment expenses



1,471





1,471

Accrued expenses and other liabilities

430

84

128

187

829

Total liabilities

$

2,182

$

2,106

$

423

$

187

$

4,898

(a)

Includes the operations of ResCaps International Business Group in continental Europe and the operations in the United Kingdom.

(b)

Includes the U.S. and U.K. consumer property and casualty insurance businesses.

(c)

Includes the International Automotive Finance operations of Argentina, Ecuador, and Poland and Masterlease in the United Kingdom, Italy, Australia, Belgium, France,
Mexico, the Netherlands, and Poland.

(d)

Includes the U.S.-based factoring business of our Commercial Finance Group.

21

Notes to Consolidated Financial Statements

3. Insurance Premiums and Service Revenue Earned

The following table is a summary of insurance premiums and service revenue written and earned:

2009

2008

2007

Year ended December 31, ($ in millions)

Written

Earned

Written

Earned

Written

Earned

Insurance premiums

Direct

$

795

$

854

$

982

$

1,054

$

951

$

1,007

Assumed

604

680

737

682

644

652

Gross insurance premiums

1,399

1,534

1,719

1,736

1,595

1,659

Ceded

(604

)

(695

)

(481

)

(321

)

(183

)

(190

)

Net insurance premiums

795

839

1,238

1,415

1,412

1,469

Service revenue

685

1,138

964

1,295

1,118

1,337

Insurance premiums and service revenue written and earned

$

1,480

$

1,977

$

2,202

$

2,710

$

2,530

$

2,806

4. Other Income, Net of Losses

Details of other income, net of losses, were as follows:

Year ended December 31, ($ in millions)

2009

2008

2007

Late charges and other administrative fees (a)

$

156

$

159

$

171

Mortgage processing fees and other mortgage income (loss)

128

(257

)

70

Remarketing fees

128

120

99

Full-service leasing fees

128

154

125

Other equity method investments (b)

17

(496

)

74

Fair value adjustment on certain derivatives (c)

(56

)

(99

)

100

Fair value adjustments due to fair value option elections, net (d)

(215

)

(237

)



Real estate services, net

(267

)

(62

)

218

Other, net

179

100

99

Total other income, net of losses

$

198

$

(618

)

$

956

(a)

Includes nonmortgage securitization fees.

(b)

During 2008, we recognized $765 million in losses related to an investment accounted for using the equity method. The losses included $195 million as an
estimate of our share of the investees net loss and the impairment of our remaining investment interests of $570 million. As of December 31, 2008, we have no remaining balance in our investment, no further financial obligations,
and have ceased equity method accounting.

(c)

Refer to Note 21 for a description of derivative instruments and hedging activities.

(d)

Refer to Note 27 for a description of fair value option elections.

22

Notes to Consolidated Financial Statements

5. Other Operating Expenses

Details of other operating expenses were as follows:

Year ended December 31, ($ in millions)

2009

2008

2007

Mortgage representation and warranty expense, net

$

1,494

$

238

$

256

Insurance commissions

635

803

831

Technology and communications expense

594

566

580

Professional services

506

608

383

Advertising and marketing

202

154

198

Vehicle remarketing and repossession

196

288

198

Lease and loan administration

164

152

204

Full-service leasing vehicle maintenance costs

132

150

115

Rent and storage

108

158

181

Premises and equipment depreciation

85

124

148

Restructuring expenses

63

192

129

Other

1,063

1,600

1,102

Total other operating expenses

$

5,242

$

5,033

$

4,325

6. Trading Securities

The fair value for our portfolio of trading securities was as follows:

December 31, ($ in millions)

2009

2008

Trading securities

U.S. Treasury

$



$

409

Mortgage-backed

Residential

143

316

Commercial



7

Asset-backed

596

474

Debt and other



1

Total trading securities

$

739

$

1,207

Net unrealized gains (losses) (a)

$

203

$

(1,864

)

Pledged as collateral

$

61

$

827

(a)

Unrealized gains and losses are included in other gain (loss) on investments, net, on a current period basis. Net unrealized losses totaled $1,590 million during
the year ended December 31, 2007.

23

Notes to Consolidated Financial Statements

7. Investment Securities

Our portfolio of investment securities includes bonds, equity securities, asset- and mortgage-backed securities, notes, interests in
securitization trusts, and other investments. The cost, fair value, and gross unrealized gains and losses on available-for-sale and held-to-maturity securities were as follows:

2009

2008

Cost

Grossunrealized

Fairvalue

Cost

Grossunrealized

Fairvalue

December 31, ($ in millions)

gains

losses

gains

losses

Available-for-sale securities

Debt securities

U.S. Treasury and federal agencies

$

3,501

$

15

$

(6

)

$

3,510

$

389

$

31

$



$

420

States and political subdivisions

779

36

(4

)

811

876

31

(26

)

881

Foreign government

1,161

20

(8

)

1,173

887

25



912

Mortgage-backed

Residential (a)

3,404

76

(19

)

3,461

191

6

(2

)

195

Commercial









17



(2

)

15

Asset-backed

1,000

7

(2

)

1,005

664



(2

)

662

Corporate debt securities

1,408

74

(9

)

1,473

2,431

24

(165

)

2,290

Other

47





47

350

4

(1

)

353

Total debt securities (b)

11,300

228

(48

)

11,480

5,805

121

(198

)

5,728

Equity securities

631

52

(8

)

675

525

79

(98

)

506

Total available-for-sale securities

$

11,931

$

280

$

(56

)

$

12,155

$

6,330

$

200

$

(296

)

$

6,234

Held-to-maturity securities

Total held-to-maturity securities

$

3

$



$



$

3

$

3

$



$



$

3

(a)

Residential mortgage-backed securities include agency-backed bonds totaling $2,248 million and $16 million at December 31, 2009 and 2008,
respectively.

(b)

In connection with certain borrowings and letters of credit relating to certain assumed reinsurance contracts, $164 million and $154 million of primarily
U.K. Treasury securities were pledged as collateral as of December 31, 2009 and 2008, respectively.

24

Notes to Consolidated Financial Statements

The maturity distribution of available-for-sale debt securities outstanding is
summarized in the following tables. Prepayments may cause actual maturities to differ from scheduled maturities.

Total

Due in oneyear or less

Due after oneyear throughfive years

Due after fiveyears throughten years

Due after tenyears (a)

December 31, 2009 ($ in millions)

Amount

Yield

Amount

Yield

Amount

Yield

Amount

Yield

Amount

Yield

Fair value of available-for-sale debt securities (b)

U.S. Treasury and federal agencies

$

3,510

1.9

%

$

103

1.1

%

$

3,390

1.9

%

$

17

4.1

%

$





%

States and political subdivisions

811

7.0

9

7.0

175

7.2

147

7.0

480

6.9

Foreign government

1,173

3.8

66

1.7

872

3.8

229

4.5

6

5.3

Mortgage-backed

Residential

3,461

6.5





2

6.5

36

13.0

3,423

6.4

Asset-backed

1,005

2.5

34

5.2

735

2.3

186

2.6

50

3.9

Corporate debt

1,473

5.2

283

3.4

575

5.8

570

5.4

45

6.9

Other

47

3.6





32

3.4

15

4.0





Total available-for-sale debt securities

$

11,480

4.3

%

$

495

2.8

%

$

5,781

2.8

%

$

1,200

5.2

%

$

4,004

6.5

%

Amortized cost of available-for-sale debt securities

$

11,300

$

473

$

5,728

$

1,169

$

3,930

(a)

Investments with no stated maturities are included as contractual maturities of greater than 10 years. Actual maturities may differ due to call or prepayment
options.

(b)

Yields on tax-exempt obligations have been computed on a tax-equivalent basis.

Total

Due in oneyear or less

Due after oneyear throughfive years

Due after fiveyears throughten years

Due after tenyears (a)

December 31, 2008 ($ in millions)

Amount

Yield

Amount

Yield

Amount

Yield

Amount

Yield

Amount

Yield

Fair value of available-for-sale debt securities (b)

U.S. Treasury and federal agencies

$

420

3.9

%

$

81

3.1

%

$

208

4.0

%

$

109

4.5

%

$

22

4.5

%

States and political subdivisions

881

7.6

16

9.2

223

7.6

210

7.4

432

7.7

Foreign government

912

3.4

403

1.2

325

4.9

166

5.3

18

9.2

Mortgage-backed

Residential

195

5.3

2

10.3









193

5.2

Commercial

15

5.4





2

6.0





13

5.4

Asset-backed

662

0.4

585

0.1

63

2.7

10

4.4

4

0.7

Corporate debt

2,290

5.7

324

4.5

999

5.8

888

5.9

79

6.5

Other

353

3.7

320

3.6

32

4.9

1







Total available-for-sale debt securities

$

5,728

4.8

%

$

1,731

2.1

%

$

1,852

5.5

%

$

1,384

5.9

%

$

761

6.8

%

Amortized cost of available-for-sale debt securities

$

5,805

$

1,726

$

1,856

$

1,425

$

798

(a)

Investments with no stated maturities are included as contractual maturities of greater than 10 years. Actual maturities may differ due to call or prepayment
options.

(b)

Yields on tax-exempt obligations have been computed on a tax-equivalent basis.

25

Notes to Consolidated Financial Statements

The following table presents gross gains and losses realized upon the sales of
available-for-sale securities and other-than-temporary impairment.

Year ended December 31, ($ in millions)

2009

2008

2007

Gross realized gains

$

349

$

109

$

253

Gross realized losses

(129

)

(238

)

(65

)

Other-than-temporary impairment

(55

)

(223

)

(5

)

Net realized gains (losses)

$

165

$

(352

)

$

183

The following table presents interest and dividends on investments.

Year ended December 31, ($ in millions)

2009

2008

2007

Taxable interest

$

320

$

442

$

901

Taxable dividends

9

26

37

Interest and dividends exempt from U.S. federal income tax

37

43

30

Total interest and dividends

$

366

$

511

$

968

Certain available-for-sale securities were
sold at a loss in 2009, 2008, and 2007 as a result of market conditions within these respective periods (e.g., a downgrade in the rating of a debt security). The table below summarizes available-for-sale securities in an unrealized loss
position in accumulated other comprehensive income. Based on the methodology described below that has been applied to these securities, we believe that the unrealized losses relate to factors other than credit losses in the current market
environment. As of December 31, 2009, we do not have the intent to sell the debt securities with an unrealized loss position in accumulated other comprehensive income, and it is not more likely than not that we will not be required to sell
these securities before recovery of their amortized cost basis. Also, as of December 31, 2009, we had the ability and intent to hold equity securities with an unrealized loss position in accumulated other comprehensive income. As a result,
we believe that the securities with an unrealized loss position in accumulated other comprehensive income are not considered to be other-than-temporarily impaired as of December 31, 2009. Refer to Note 1 to the Consolidated Financial
Statements for further information related to investment securities and our methodology for evaluating potential other-than-temporary impairment.

2009

2008

Less than 12months

12 months orlonger

Less than 12months

12 months orlonger

($ in millions)

Fairvalue

Unrealizedloss

Fairvalue

Unrealizedloss

Fairvalue

Unrealizedloss

Fairvalue

Unrealizedloss

Available-for-sale securities

Debt securities

U.S. Treasury and federal agencies

$

1,430

$

(6

)

$



$



$

7

$



$

1

$



States and political subdivisions

82

(2

)

8

(2

)

251

(18

)

56

(8

)

Foreign government

536

(8

)





36



19



Mortgage-backed

811

(14

)

6

(5

)

19

(2

)

23

(2

)

Asset-backed

202

(1

)

22

(1

)

13

(2

)

18



Corporate debt securities

47

(1

)

120

(8

)

1,190

(144

)

235

(21

)

Other

7







1



4



Total temporarily impaired debt securities

3,115

(32

)

156

(16

)

1,517

(166

)

356

(31

)

Equity securities

115

(5

)

52

(3

)

249

(98

)

4



Total temporarily impaired available-for-sale securities

$

3,230

$

(37

)

$

208

$

(19

)

$

1,766

$

(264

)

$

360

$

(31

)

We employ a systematic methodology that considers available evidence in evaluating other-than-temporary
impairment of our investments classified as available-for-sale. If the cost of an investment exceeds its fair value, we evaluated, among other factors, the magnitude and duration of the decline in fair value, the financial health of and business
outlook for the

26

Notes to Consolidated Financial Statements

issuer, changes to the rating of the security by a rating agency, the performance of the underlying assets for interests in securitized assets, whether we intend to sell the investment, and
whether it is more likely than not we will be required to sell the debt security before recovery of its amortized cost basis. We had other-than-temporary impairment write-downs of $55 million, $223 million, and $5 million for the
years ended December 31, 2009, 2008, and 2007, respectively. Gross unrealized gains and losses on investment securities available-for-sale totaled $278 million and $123 million, respectively as of December 31, 2007.

In April 2009, the FASB amended the other-than-temporary impairment model for debt securities. The impairment model for
equity securities was not affected. Under the new guidance, other-than-temporary impairment losses for debt securities must be recognized in earnings if an entity has the intent to sell the security or it is more likely than not that it will be
required to sell the security before recovery of its amortized cost basis. However, even if an entity does not expect to sell a security, it must evaluate expected cash flows to be received and determine if a credit loss has occurred. In the event
of a credit loss, only the amount of impairment associated with the credit loss is recognized in earnings. Amounts relating to factors other than credit losses are recorded in other comprehensive income. The guidance also requires additional
disclosures regarding the calculation of credit losses as well as factors considered in reaching a conclusion that an investment is not other-than-temporarily impaired. We adopted the new guidance effective for the period ended
June 30, 2009. We did not record a transition adjustment for securities held at June 30, 2009, that were previously considered other-than-temporarily impaired as all previously impaired securities remaining in the portfolio were
either equity securities or debt securities with impairments relating to credit losses.

8. Loans Held-for-sale

The composition of loans held-for-sale was as follows:

2009

2008

December 31, ($ in millions)

Domestic

Foreign

Total

Domestic

Foreign

Total

Consumer

Automobile

$

9,417

$

184

$

9,601

$

3,805

$



$

3,805

1st Mortgage

9,269

530

9,799

1,576

1,052

2,628

Home equity

1,068



1,068



1

1

Total consumer

19,754

714

20,468

5,381

1,053

6,434

Commercial

Commercial and industrial

Automobile







148

103

251

Resort finance (a)







1,223



1,223

Other



157

157



9

9

Commercial real estate

Mortgage







2



2

Total commercial



157

157

1,373

112

1,485

Total loans held-for-sale

$

19,754

$871

$20,625

$6,754

$

1,165

$

7,919

(a)

The resort finance business of our Commercial Finance Group provides capital to resort and timeshare developers. As of March 31, 2009, the resort finance
business was reclassified from loans held-for-sale to commercial finance receivables and loans, net of unearned income, on the Consolidated Balance Sheet because it was unlikely a sale would occur within the foreseeable future.

27

Notes to Consolidated Financial Statements

During the year ended December 31, 2009, our Mortgage operations reclassified loans with
an unpaid principal balance of $8.5 billion from finance receivables and loan, net of unearned income, to loans held-for-sale on our Consolidated Balance Sheet. Due to capital preservation strategies, business divestitures, and future liquidity
considerations, we changed our intent to hold these mortgage loans for the foreseeable future. These loans were measured at fair value immediately prior to the transfer resulting in a valuation loss of approximately $3.4 billion during the year
ended December 31, 2009. We recognized the credit and noncredit component of these losses in provision for loan losses and gain (loss) on mortgage loans, net, respectively, in our Consolidated Statement of Income.

9. Finance Receivables and Loans, Net of Unearned Income

The composition of finance receivables and loans, net of unearned income, before allowance for loan losses was as follows:

2009

2008

December 31, ($ in millions)

Domestic

Foreign

Total

Domestic

Foreign

Total

Consumer

Automobile

$

12,514

$

17,731

$

30,245

$

16,281

$

21,705

$

37,986

1st Mortgage (a)

7,960

405

8,365

13,542

4,604

18,146

Home equity

4,238

1

4,239

7,777

54

7,831

Total consumer

24,712

18,137

42,849

37,600

26,363

63,963

Commercial

Commercial and industrial

Automobile

19,601

7,035

26,636

16,913

9,094

26,007

Mortgage

1,572

96

1,668

1,627

195

1,822

Resort finance

843



843







Other

1,845

437

2,282

3,257

960

4,217

Commercial real estate

Automobile

2,008

221

2,229

1,941

167

2,108

Mortgage

121

162

283

1,696

260

1,956

Total commercial

25,990

7,951

33,941

25,434

10,676

36,110

Notes receivable from General Motors

3

908

911



1,655

1,655

Total finance receivables and loans (b)

$

50,705

$

26,996

$

77,701

$

63,034

$

38,694

$

101,728

(a)

Domestic residential mortgages include $1.3 billion and $1.9 billion at fair value as a result of fair value option election as of December 31, 2009
and 2008, respectively. Refer to Note 27 for additional information.

(b)

Totals are net of unearned income of $2.5 billion and $3.4 billion at December 31, 2009 and 2008, respectively.

28

Notes to Consolidated Financial Statements

The following table presents an analysis of the activity in the allowance for loan
losses on finance receivables and loans.

2009

2008

Year ended December 31, ($ in millions)

Consumer

Commercial

Total

Consumer

Commercial

Total

Allowance at beginning of year

$

2,536

$

897

$

3,433

$

2,141

$

614

$

2,755

Provision for loan losses

4,713

898

5,611

2,360

742

3,102

Charge-offs

Domestic

(2,425

)

(955

)

(3,380

)

(1,714

)

(478

)

(2,192

)

Foreign

(557

)

(76

)

(633

)

(326

)

(21

)

(347

)

Write downs related to transfers to held-for-sale

(3,428

)

(10

)

(3,438

)







Total charge-offs

(6,410

)

(1,041

)

(7,451

)

(2,040

)

(499

)

(2,539

)

Recoveries

Domestic

257

19

276

197

22

219

Foreign

71

5

76

67

4

71

Total recoveries

328

24

352

264

26

290

Net charge-offs

(6,082

)

(1,017

)

(7,099

)

(1,776

)

(473

)

(2,249

)

Reduction of allowance due to fair value option election







(489

)



(489

)

Reduction of allowance due to deconsolidation (a)







(127

)



(127

)

Discontinued operations

436

(4

)

432

301

7

308

Other

61

7

68

126

7

133

Allowance at end of year

$

1,664

$

781

$

2,445

$

2,536

$

897

$

3,433

(a)

During 2008, our Mortgage operations completed the sale of residual cash flows related to a number of on-balance sheet securitizations. Our Mortgage operations
completed the actions necessary to cause the securitization trusts to satisfy the QSPE requirements. The actions resulted in the deconsolidation of various securitization trusts.

29

Notes to Consolidated Financial Statements

The following tables present information about our commercial impaired finance
receivables and loans.

December 31, ($ in millions)

2009

2008

Impaired finance receivables and loans

With an allowance

$

1,760

$

2,780

Without an allowance

296

106

Total impaired loans

$

2,056

$

2,886

Allowance for impaired loans

$

488

$

703

Year ended December 31, ($ in millions)

2009

2008

2007

Average balance of impaired loans during the year

$

2,768

$

1,600

$

1,066

Interest income recognized on impaired loans during the year

$

16

$

9

$

6

We have loans that were acquired in a
transfer, which at acquisition had evidence of deterioration of credit quality since origination and for which it was probable (at acquisition) that all contractually required payments would not be collected. The carrying amount of these loans
included in the balance sheet amounts of finance receivables and loans, was as follows:

December 31, ($ in millions)

2009

2008

2007

Consumer finance receivables

$

318

$

965

$

1,641

Allowance for loan losses

(37

)

(147

)

(121

)

Total carrying amount

$

281

$

818

$

1,520

For loans acquired after December 31, 2005, we are required to record revenue using an accretable
yield method. The following table represents accretable yield activity:

Year ended December 31, ($ in millions)

2009

2008

Accretable yield at beginning of year

$

6

$

98

Additions





Accretions

(5

)

(14

)

Reclassification from nonaccretable difference

2

(71

)

Disposals

(1

)

(7

)

Accretable yield at end of year

$

2

$

6

Loans acquired during each year for which it was probable at acquisition that all contractually required
payments would not be collected are as follows:

Year ended December 31, ($ in millions)

2009

2008

Contractually required payments receivable at acquisition  consumer

$



$

157

Cash flows expected to be collected at acquisition



154

Basis in acquired loans at acquisition



91

10. Off-balance Sheet Securitizations

We sell pools of automotive and residential mortgage loans via securitization transactions that qualify for off-balance sheet treatment
under GAAP. The purpose of these securitizations is to provide permanent funding and asset and liability management. In executing the securitization transactions, we typically sell the pools to wholly owned special-purpose entities (SPEs),
which then sell the loans to a separate, transaction-specific bankruptcy remote SPE (a securitization trust) for cash, servicing rights, and in some transactions, retained interests. The securitization trust issues and sells interests to

30

Notes to Consolidated Financial Statements

investors that are collateralized by the secured loans and entitle the investors to specified cash flows generated from the securitized loans. The following discussion and related information is
only applicable to the transfers of finance receivables and loans that qualify as off-balance sheet.

Each securitization is
governed by various legal documents that limit and specify the activities of the securitization vehicle. The securitization vehicle is generally allowed to acquire the loans being sold to it, issue interests to investors to fund the acquisition of
the loans, and to enter into derivatives or other yield maintenance contracts to hedge or mitigate certain risks related to the asset pool or debt securities. Additionally, the securitization vehicle is required to service the assets it holds and
the debt or interest it has issued. A servicer appointed within the underlying legal documents performs these functions. Servicing functions include, but are not limited to, collecting payments from borrowers, performing escrow functions, monitoring
delinquencies, liquidating assets, investing funds until distribution, remitting payments to investors, and accounting for and reporting information to investors.

Generally, the assets initially transferred into the securitization vehicle are the sole funding sources to the investors and the various
other parties that perform services for the transaction, such as the servicer or the trustee. In certain transactions, a liquidity provider or facility may exist to provide temporary liquidity to the structure. The liquidity provider generally is
reimbursed prior to other parties in subsequent distribution periods. Bond insurance may also exist to cover certain shortfalls to certain investors. In certain securitizations, the servicer is required to advance scheduled principal and interest
payments due on the pool regardless of whether they have been received from borrowers. The servicer is allowed to reimburse itself for these servicing advances. Lastly, certain securitization transactions may allow for the acquisition of additional
loans subsequent to the initial transaction. Principal collections on other loans and/or the issuance of new interests, such as variable funding notes, generally fund these loans; we are often contractually required to invest in these new interests.
Additionally, we provide certain guarantees as discussed in Note 30.

As part of our securitizations, we typically retain
servicing responsibilities and other retained interests. Accordingly, our servicing responsibilities result in continued involvement in the form of servicing the underlying asset (primary servicing) and/or servicing the bonds resulting from the
securitization transactions (master servicing) through servicing platforms. As noted above, certain securitizations require the servicer to advance scheduled principal and interest payments due on the pool regardless of whether they are received
from borrowers. Accordingly, we are required to provide these servicing advances when applicable. In certain of our securitizations, we may be required to fund certain investor-triggered put redemptions and are allowed to reimburse ourselves by
repurchasing loans at par. Typically, we have concluded that the fee we are paid for servicing retail automotive finance receivables represents adequate compensation and consequently we do not recognize a servicing asset or liability. We do not
recognize a servicing asset or liability for automotive wholesale loans because of their short-term revolving nature. As of December 31, 2009, the weighted average basic servicing fees for our primary servicing activities were
100 basis points and 27 basis points of the outstanding principal balance for sold retail automotive finance receivables and residential mortgage loans, respectively. Additionally, we retain the rights to cash flows remaining after the
investors in most securitization trusts have received their contractual payments. Refer to Note 1 and Note 27 regarding the valuation of servicing rights.

We maintain cash reserve accounts at predetermined amounts for certain securitization activities in the event that deficiencies occur in
cash flows owed to the investors. The amounts available in these cash reserve accounts related to securitizations of retail automotive finance receivables, automotive wholesale loans, and residential mortgage loans, totaled $119 million,
$0 million, and $221 million as of December 31, 2009, respectively, and $136 million, $576 million, and $202 million as of December 31, 2008, respectively.

The retained interests we may receive represent a continuing economic interest in the securitization. Retained interests include, but are
not limited to, senior or subordinate mortgage- or asset-backed securities, interest-only strips, principal-only strips, and residuals. Certain of these retained interests provide credit enhancement to the securitization structure as they may absorb
credit losses or other cash shortfalls. Additionally, the securitization documents may require cash flows to be directed away from certain of our retained interests due to specific over-collateralization requirements, which may or may not be
performance driven. The value of any interests that continue to be held take into consideration the features of the securitization transaction and are generally subject to credit, prepayment, and/or interest rate risks on the transferred financial
assets. Refer to Note 1 and Note 27 regarding the valuation of retained interests. We are typically not required to continue retaining these interests. In the past, we have sold certain of these retained interests when it best aligns to
our economic or strategic plans.

31

Notes to Consolidated Financial Statements

The investors and/or securitization trusts have no recourse to us with the exception of
customary market representation and warranty repurchase provisions and in certain transactions, early payment default provisions. Representation and warranty repurchase provisions generally require us to repurchase loans to the extent it is
subsequently determined that the loans were ineligible or were otherwise defective at the time of sale. Due to market conditions, early payment default provisions were included in certain securitization transactions that require us to repurchase
loans if the borrower is delinquent in making certain specific payments subsequent to the sale.

We hold certain conditional
repurchase options that allow us to repurchase assets from the securitization. The majority of the securitizations provide us, as servicer, with a call option that allows us to repurchase the remaining assets or outstanding debt once the asset pool
reaches a predefined level, which represents the point where servicing is burdensome rather than beneficial. Such an option is referred to as a clean-up call. As servicer, we are able to exercise this option at our discretion anytime after the asset
pool size falls below the predefined level. The repurchase price for the loans is typically par plus accrued interest. Additionally, we may hold other conditional repurchase options that allow us to repurchase the asset if certain events outside our
control are met. The typical conditional repurchase option is a delinquent loan repurchase option that gives us the option to purchase the loan if it exceeds a certain pre-specified delinquency level. We have complete discretion regarding when or if
we will exercise these options, but generally we will do so when it is in our best interest. We purchased $1 million and $2 million of mortgage loans under delinquent loan repurchase options during the years ended
December 31, 2009 and 2008, respectively.

As required under GAAP, the loans sold into off-balance sheet
securitization transactions are removed from our balance sheet. The assets obtained from the securitization are reported as cash, retained interests, or servicing rights. We have elected fair value treatment for our existing mortgage servicing
rights portfolio. We classify our retained interest portfolio as trading securities, available-for-sale securities, or other assets. The portfolio is carried at fair value with valuation adjustments reported through earnings or equity. We report the
valuation adjustments related to trading securities as other income (loss) on investments, net, in our Consolidated Statement of Income. The valuation adjustments related to unrealized gains and losses of our available-for-sale securities are
reported as a component of accumulated other comprehensive income on our Consolidated Balance Sheet. We report the realized gains and losses of our available-for-sale securities as other income (loss) on investments, net, in our Consolidated
Statement of Income. The valuation adjustments and any gains and losses recognized by our retained interests classified as other assets are reported as other income, net of losses, in our Consolidated Statement of Income. Liabilities incurred as
part of the transaction, such as representation and warranty provisions, are recorded at fair value at the time of sale and are reported as accrued expenses and other liabilities on our Consolidated Balance Sheet. Upon the sale of the loans, we
recognize a gain or loss on sale for the difference between the assets recognized, the assets derecognized, and the liabilities recognized as part of the transaction.

The following summarizes the type and amount of loans held by the securitization trusts in transactions that qualified for off-balance
sheet treatment:

December 31, ($ in billions)

2009

2008

Securitization

Retail finance receivables

$

7.5

$

13.3

Wholesale loans



12.5

Mortgage loans (a)

99.6

126.2

Total off-balance sheet activities

$

107.1

$

152.0

(a)

Excludes $237 million and $1.6 billion at December 31, 2009 and 2008, respectively, of delinquent loans held by securitization trusts that we have the option
to repurchase as they are included in consumer finance receivables and loans.

32

Notes to Consolidated Financial Statements

Key economic assumptions used in measuring the estimated fair value of retained
interests of sales completed during 2009, 2008, and 2007, as of the dates of those sales, were as follows:

Year ended December 31,

Retail financereceivables (a)

Mortgageoperations (b)

2009

Key assumptions (c)

Prepayment speed (d)

(e)

10.012.0%

Weighted average life (in years)

(e)

4.66.3

Expected credit losses

(e)

11.0%

Discount rate

(e)

0.616.0%

2008

Key assumptions (c)

Prepayment speed (d)

1.21.4%

1.930.0%

Weighted average life (in years)

1.92.0

2.49.1

Expected credit losses

1.62.5%

0.03.5%

Discount rate

22.025.0%

2.825.0%

2007

Key assumptions (c)

Prepayment speed (d)

1.21.4%

0.643.4%

Weighted average life (in years)

1.81.9

1.114.0

Expected credit losses

1.52.1%

0.014.5%

Discount rate

16.020.0%

4.332.6%

(a)

The fair value of retained interests in wholesale securitization approximates carrying value because of the short-term and floating-rate nature of wholesale loans.

(b)

Included within residential mortgage loans are home equity loans and lines, high loan-to-value loans, and residential first and second mortgage loans.

(c)

The assumptions used to measure the expected yield on variable-rate retained interests are based on a benchmark interest rate yield curve plus a contractual spread, as
appropriate. The actual yield curve utilized varies depending on the specific retained interests.

(d)

Based on monthly prepayment speeds for finance receivables and constant prepayment rate (CPR) for mortgage loans.

(e)

During 2009, no new off-balance sheet retail finance receivables were sold.

The following table summarizes pretax gains on securitizations and certain cash flows received from and paid to securitization trusts for
transfers of finance receivables and loans completed during 2009.

2009

Year ended December 31, ($ in millions)

Retail financereceivables

Wholesaleloans

Mortgageoperations

Pretax gains on securitization

$



$

110

$

21

Cash inflows

Proceeds from new securitizations





1,258

Servicing fees received

111

39

272

Other cash flows received on retained interests

269

1,009

119

Proceeds from collections reinvested in revolving securitizations



5,998



Repayments of servicing advances

45



1,266

Cash outflows

Servicing advances

(27

)



(1,389

)

Purchase obligations and options

Representations and warranties obligations





(64

)

Administrator or servicer actions

(58

)





Asset performance conditional calls





(1

)

Cleanup calls

(24

)





33

Notes to Consolidated Financial Statements

The following table summarizes pretax gains on securitizations and certain cash flows
received from and paid to securitization trusts for transfers of finance receivables and loans completed in 2008 and 2007.

2008

2007

Year ended December 31,

($ in millions)

Retail financereceivables

Wholesaleloans

Mortgageoperations

Retail financereceivables

Wholesaleloans

Mortgageoperations

Pretax (losses) gains on securitization

$

(68

)

$

269

$

(161

)

$

141

$

511

$

45

Cash inflows

Proceeds from new securitizations

4,916



2,333

11,440

1,318

35,861

Servicing fees received

165

117

385

96

157

545

Other cash flows received on retained interests

301

505

193

284

522

401

Proceeds from collections reinvested in revolving securitizations



57,022





87,985

122

Repayments of servicing advances

65



1,145

79



987

Cash outflows

Servicing advances

(72

)



(1,195

)

(90

)



(1,023

)

Purchase obligations and options

Mortgage loans under conditional call options











(147

)

Representations and warranties obligations





(160

)





(457

)

Administrator or servicer actions

(62

)





(39

)



(54

)

Asset performance conditional calls





(2

)





(101

)

Cleanup calls

(6

)





(8

)



(254

)

The following table summarizes the key economic assumptions and the sensitivity of the fair value of
retained interests at December 31, 2009 and 2008, to immediate 10% and 20% adverse changes in those assumptions.

2009

2008

December 31, ($ in millions)

Retail financereceivables (a)

Mortgageoperations

Retail financereceivables (a)

Mortgageoperations

Carrying value/fair value of retained interests

$661

$268

$897

$369

Weighted average life (in years)

0.00.9

0.04.6

0.01.5

0.910.4

Annual prepayment rate

0.21.1%WAM

0.697.5%WAM

0.61.1%WAM

0.185.5%CPR

Impact of 10% adverse change

$(1)

$(20)

$(5)

$(10)

Impact of 20% adverse change

(2)

(36)

(9)

(21)

Loss assumption

1.14.8% (b)

0.0100.0%

0.23.4% (b)

0.059.0%

Impact of 10% adverse change

$(13)

$(4)

$(23)

$(9)

Impact of 20% adverse change

(26)

(8)

(46)

(16)

Discount rate

40%

0.2102.5%

9.533.0%

(1.3) 125.3%

Impact of 10% adverse change

$(23)

$(10)

$(42)

$(16)

Impact of 20% adverse change

(44)

(20)

(81)

(30)

Market rate

(c)

(c)

(c)

(c)

Impact of 10% adverse change

$

$(3)

$

$(2)

Impact of 20% adverse change



(4)



(3)

(a)

The fair value of retained interests in wholesale securitizations approximates the carrying value of zero and $710 million at December 31, 2009 and 2008,
respectively, because of the short-term and floating-rate nature of wholesale receivables.

(b)

Net of a reserve for expected credit losses totaling $0 million and $8 million at December 31, 2009 and 2008, respectively. These amounts are
included in the fair value of the retained interests, which are classified as investment securities.

(c)

Forward benchmark interest rate yield curve plus contractual spread.

34

Notes to Consolidated Financial Statements

These sensitivities are hypothetical and should be viewed with caution. Changes in fair
value based on a 10% and 20% variation in assumptions generally cannot be extrapolated because the relationship of the change in assumption to the change in fair value may not be linear. Also, in this table, the effect of a variation in a particular
assumption on the fair value of the retained interest is calculated without changing any other assumption. In reality, changes in one factor may result in changes in another, which may magnify or counteract the sensitivities. Additionally, we
utilize derivative instruments to mitigate interest rate and prepayment risks associated with certain of the retained interests; the effects of these hedge strategies have not been considered herein.

Static pool losses not applicable to wholesale finance receivable securitizations because of their short-term nature.

The following table presents components of securitized financial assets and other assets managed along with quantitative information
about delinquencies and net credit losses.

Total financereceivables and loans

Amount 60 daysor more past due

Net creditlosses

December 31, ($ in millions)

2009

2008

2009

2008

2009

2008

Retail automotive

$

47,187

$

55,884

$

1,224

$

1,060

$

1,411

$

1,034

Residential mortgage

126,853

154,841

19,135

13,266

7,478

5,247

Total consumer

174,040

210,725

20,359

14,326

8,889

6,281

Wholesale

25,566

35,205

89

157

21

10

Other automotive and commercial

9,286

13,636

1,262

1,303

793

417

Total commercial

34,852

48,841

1,351

1,460

814

427

Total managed portfolio (a)

208,892

259,566

$

21,710

$

15,786

$

9,703

$

6,708

Securitized finance receivables and loans

(110,566

)

(149,919

)

Loans held-for-sale

(20,625

)

(7,919

)

Total finance receivables and loans

$

77,701

$

101,728

(a)

Managed portfolio represents finance receivables and loans on the balance sheet or that have been securitized, excluding securitized finance receivables and loans that
we continue to service but have no other continuing involvement (i.e., in which we retain an interest or risk of loss in the underlying receivables).

11. Investment in Operating Leases

Investments in operating leases were as follows:

December 31, ($ in millions)

2009

2008

Vehicles and other equipment, after impairment

$

23,919

$

35,625

Accumulated depreciation

(7,924

)

(9,235

)

Investment in operating leases, net

$

15,995

$

26,390

The future lease nonresidual rental payments due from customers for equipment on operating leases at
December 31, 2009, totaled $5,466 million and are due as follows: $3,664 million in 2010, $1,475 million in 2011, $279 million in 2012, $46 million in 2013, and $2 million in 2014 and after.

35

Notes to Consolidated Financial Statements

Our investment in operating lease assets represents the net book value of our leased
assets based on the expected residual value upon remarketing the vehicle at the end of the lease. As described in Note 25, GM may sponsor residual support programs that result in the contractual residual value being in excess of our standard
residual value. GM reimburses us if remarketing sales proceeds are less than the customers contract residual value limited to our standard residual value. In addition to residual support programs, GM also participates in a risk-sharing
arrangement whereby GM shares equally in residual losses to the extent that remarketing proceeds are below our standard residual rates (limited to a floor). In connection with the sale of 51% ownership interest in GMAC, GM settled its estimated
liabilities with respect to residual support and risk sharing on a portion of our operating lease portfolio. Based on the December 31, 2009, outstanding U.S. operating lease portfolio, the maximum amount that could be paid by GM under
the residual support programs and the risk-sharing arrangement is approximately $1.1 billion and $1.3 billion, respectively, as more fully discussed in Note 25.

In light of the significant declines in used vehicle prices during 2008 in the United States, Canada, and several international markets,
we concluded certain triggering events occurred during the year ended December 31, 2008, requiring an evaluation of recoverability for certain operating lease assets within our Global Automotive Finance operations. We grouped these
operating lease assets at the lowest level that we could reasonably estimate the identifiable cash flows. In assessing for recoverability, we compared our estimates of future cash flows related to these lease assets to their corresponding carrying
values. We considered all of the expected cash flows including customer payments, the expected residual value upon remarketing the vehicle at lease termination, and any payments from GM under residual and risk-sharing agreements. To the extent these
undiscounted cash flows were less than their respective carrying values, we discounted the cash flows to arrive at an estimated fair value. As a result of this evaluation, during the year ended December 31, 2008, we reduced our carrying
values to equal the estimated fair values and realized impairment charges of $1,234 million. Impairments recognized by our North American Automotive Finance operations consisted of $808 million related to sport-utility vehicles and trucks
in the United States and Canada and $384 million related to the car portfolio in the United States. The impairment recognized by our International Automotive Finance operations totaled $42 million for full-service leasing portfolio. During
the year ended December 31, 2009, $16 million of the 2008 impairment charges related to the full-service leasing portfolio were reclassified to discontinued operations.

While we believe our estimates of discounted future cash flows used for the impairment analysis were reasonable based on current market
conditions, the process required the use of significant estimates and assumptions. In developing these estimates and assumptions, management used all available evidence. However, because of uncertainties associated with estimating the amounts,
timing, and likelihood of possible outcomes, the actual cash flows could ultimately differ from those estimated as part of the recoverability and impairment analyses.

Imbedded in our residual value projections are estimates of projected recoveries from GM relative to residual support and risk-sharing
agreements. No adjustment to these estimates has been made for the collectability of the projected recoveries from GM. As of December 31, 2009, expected residual values included estimates of payments from GM of approximately
$1.0 billion related to residual support and risk-sharing agreements. To the extent GM is not able to fully honor its obligations relative to these agreements, our depreciation expense and remarketing performance would be negatively impacted.

36

Notes to Consolidated Financial Statements

12. Mortgage Servicing Rights

We define our classes of mortgage servicing rights (MSRs) based on both the availability of market inputs and the manner in which we
manage our risks of our servicing assets and liabilities. Sufficient market inputs exist to determine the fair value of our recognized servicing assets and servicing liabilities.

The following table summarizes activity related to MSRs carried at fair value.

($ in millions)

2009

2008

Estimated fair value at January 1,

$

2,848

$

4,703

Additions obtained from sales of financial assets

807

1,182

Additions from purchases of servicing rights

19



Subtractions from sales of servicing assets

(19

)

(797

)

Changes in fair value:

Due to changes in valuation inputs or assumptions used in the valuation model

Other changes in fair value primarily include the accretion of the present value of the discount related to forecasted cash flows and the economic runoff of the
portfolio.

We pledged MSRs of $1.5 billion and $1.8 billion as collateral for borrowings at
December 31, 2009 and 2008, respectively.

Changes in fair value due to changes in valuation inputs or assumptions
used in the valuation models include all changes due to a revaluation by a model or by a benchmarking exercise. This line item also includes changes in fair value due to a change in valuation assumptions and/or model calculations. Other changes in
fair value primarily include the accretion of the present value of the discount related to forecasted cash flows and the economic runoff of the portfolio, foreign currency adjustments, and the extinguishment of mortgage servicing rights related to
clean-up calls of securitization transactions.

The key economic assumptions and sensitivity of the current fair value of MSRs
to immediate 10% and 20% adverse changes in those assumptions are as follows:

December 31, ($ in millions)

2009

2008

Range of prepayment speeds (constant prepayment rate)

2.447.1%

0.746.5%

Impact on fair value of 10% adverse change

$(167)

$(239)

Impact on fair value of 20% adverse change

(321)

(449)

Range of discount rates

7.215.5%

2.7130.3%

Impact on fair value of 10% adverse change

$(82)

$(32)

Impact on fair value of 20% adverse change

(160)

(62)

These sensitivities are hypothetical and
should be considered with caution. Changes in fair value based on a 10% variation in assumptions generally cannot be extrapolated because the relationship of the change in assumptions to the change in fair value may not be linear. Also, the effect
of a variation in a particular assumption on the fair value is calculated without changing any other assumption. In reality, changes in one factor may result in changes in another (e.g., increased market interest rates may result in lower
prepayments and increased credit losses) that could magnify or counteract the sensitivities. Further, these sensitivities show only the change in the asset balances and do not show any expected change in the fair value of the instruments used to
manage the interest rates and prepayment risks associated with these assets.

37

Notes to Consolidated Financial Statements

The primary risk of our servicing rights is interest rate risk and the resulting impact
on prepayments. A significant decline in interest rates could lead to higher-than-expected prepayments that could reduce the value of the MSRs. Historically, we have economically hedged the income statement impact of these risks with both derivative
and nonderivative financial instruments. These instruments include interest rate swaps, caps and floors, options to purchase these items, futures, and forward contracts and/or purchasing or selling U.S. Treasury and principal-only securities.
The fair value of derivative financial instruments used to mitigate these risks amounted to $198 million and $977 million at December 31, 2009 and 2008, respectively. The change in fair value of the derivative financial
instruments amounted to a loss of $1 billion and a gain of $2 billion for the years ended December 31, 2009 and 2008, respectively, and is included in servicing asset valuation and hedge activities, net, in the Consolidated
Statement of Income. Refer to Note 21 for a discussion of the derivative financial instruments used to hedge mortgage servicing rights.

The components of mortgage servicing fees were as follows:

Year ended December 31, ($ in millions)

2009

2008

Contractual servicing fees, net of guarantee fees and including subservicing

$

1,071

$

1,196

Late fees

77

112

Ancillary fees

164

144

Total

$

1,312

$

1,452

Our Mortgage operations that conduct
primary and master servicing activities are required to maintain certain servicer ratings in accordance with master agreements entered into with a government-sponsored entity. The servicer ratings provided by certain rating agencies are highly
correlated with our Mortgage operations consolidated tangible net worth and overall financial strength. At December 31, 2009, our Mortgage operations were in compliance with the servicer-rating requirements of the master agreements.

In certain of our Mortgage operations domestic securitizations, the surety or other provider of contractual credit
support is entitled to declare a servicer default and terminate the servicer upon the failure of the loans to meet certain portfolio delinquency and/or cumulative loss thresholds. In 2009, our Mortgage operations received notice of termination from
surety providers with respect to securitizations having an unpaid principal balance of $4.8 billion. Our Mortgage operations also recorded a loss on its MSRs of $78 million due to existing or anticipated delinquency and/or cumulative loss
threshold breaches.

13. Premiums Receivable and Other Insurance Assets

Premiums receivable and other insurance assets consisted of the following:

December 31, ($ in millions)

2009

2008

Prepaid reinsurance premiums

$

346

$

511

Reinsurance recoverable on unpaid losses

670

1,660

Reinsurance recoverable on paid losses

114

126

Premiums receivable (a)

388

698

Deferred policy acquisition costs

1,202

1,512

Total premiums receivable and other insurance assets

$

2,720

$

4,507

(a)

Net of a $7 million and $18 million allowance for uncollectible premiums receivables at December 31, 2009 and 2008, respectively.

38

Notes to Consolidated Financial Statements

14. Other Assets

Other assets consisted of:

December 31, ($ in millions)

2009

2008

Property and equipment at cost

$

1,416

$

1,535

Accumulated depreciation

(1,080

)

(1,104

)

Net property and equipment

336

431

Restricted cash collections for securitization trusts (a)

3,654

3,143

Fair value of derivative contracts in receivable position

2,654

5,014

Servicer advances

2,180

2,126

Derivative collateral placed with counterparties

1,760

826

Cash reserve deposits held-for-securitization trusts (b)

1,594

3,160

Restricted cash and cash equivalents

1,590

2,014

Debt issuance costs

829

788

Prepaid expenses and deposits

749

428

Other accounts receivable

573

2,300

Goodwill

526

1,357

Investment in used vehicles held-for-sale

522

574

Interests retained in securitization trusts

471

1,001

Real estate and other investments (c)

340

642

Repossessed and foreclosed assets, net, at lower of cost or fair value

336

916

Accrued interest and rent receivable

326

591

Other assets

1,447

1,611

Total other assets

$

19,887

$

26,922

(a)

Represents cash collection from customer payments on securitized receivables. These funds are distributed to investors as payments on the related secured debt.

(b)

Represents credit enhancement in the form of cash reserves for various securitization transactions we have executed.

(c)

Includes residential real estate investments of $50 million and $189 million and related accumulated depreciation of $1 million and $2 million for
the years ended December 31, 2009 and 2008, respectively.

The changes in the carrying amounts of
goodwill for the periods shown were as follows:

($ in millions)

North AmericanAutomotive Financeoperations

InternationalAutomotive Financeoperations

Insurance

Other

Total

Goodwill acquired prior to December 31, 2007

$

14

$

527

$

953

$

1,541

$

3,035

Accumulated impairment losses







(1,539

)

(1,539

)

Goodwill at December 31, 2007

$

14

$

527

$

953

$

2

$

1,496

Impairment losses (a)

(14

)



(42

)

(2

)

(58

)

Foreign currency translation effect



(37

)

(44

)



(81

)

Goodwill at December 31, 2008 (b)

$



$

490

$

867

$



$

1,357

Sale of reporting unit





(107

)



(107

)

Impairment losses (a)





(607

)



(607

)

Transfer of assets of discontinued operations held-for-sale



(22

)

(108

)



(130

)

Foreign currency translation



1

12



13

Goodwill at December 31, 2009 (c)

$



$

469

$

57

$



$

526

(a)

During the three months ended December 31, 2008, and the three months ended June 30, 2009, our Insurance operations initiated an evaluation of
goodwill for potential impairment, which was in addition to our annual impairment evaluation. These tests were initiated in light of a more-than-likely expectation that a reporting unit or a significant portion of a reporting unit will be sold. The
fair value was determined using offers provided by willing purchasers. Based on the preliminary results of the assessments, our Insurance operations concluded that the carrying value of these reporting units exceeded the fair value resulting in an
impairment loss during both 2008 and 2009.

(b)

Net of accumulated impairment losses of $14 million for North American Automotive Finance operations and $42 million for Insurance operations.

(c)

Net of accumulated impairment losses of $649 million for Insurance operations.

39

Notes to Consolidated Financial Statements

15. Deposit Liabilities

Deposit liabilities consisted of the following:

December 31, ($ in millions)

2009

2008

Domestic deposits

Noninterest-bearing deposits

$

1,755

$

1,496

NOW and money market checking accounts

7,213

3,578

Certificates of deposit

19,861

13,705

Dealer wholesale deposits

1,041

342

Total domestic deposits

29,870

19,121

Foreign deposits

NOW and money market checking accounts

165

9

Certificates of deposit

1,555

638

Dealer deposits

166

39

Total foreign deposits

1,886

686

Total deposit liabilities

$

31,756

$

19,807

Noninterest bearing deposits primarily
represent third-party escrows associated with our Mortgage operations loan servicing portfolio. The escrow deposits are not subject to an executed agreement and can be withdrawn without penalty at any time. At December 31, 2009 and
2008, certificates of deposit included $4.8 billion and $1.9 billion, respectively, of domestic certificates of deposit in denominations of $100 thousand or more.

The following table presents the scheduled maturity of total certificates of deposit at December 31, 2009.

Year ended December 31, ($ in millions)

2010

$

18,017

2011

2,148

2012

611

2013

307

2014

333

Total certificates of deposit

$

21,416

40

Notes to Consolidated Financial Statements

16. Debt

The following table presents the composition of our debt portfolio at December 31, 2009 and 2008.